KeyBanc Capital Markets Raises Earnings Estimates and Price Targets

Investing.com – KeyBanc Capital Markets has raised its earnings estimates and price targets for ad-focused companies, including Alphabet (NASDAQ:GOOGL), Meta Platforms Inc (NASDAQ:META), Pinterest (NYSE:PINS), and The Trade Desk (NASDAQ:TTD) ahead of their Q3 2024 earnings.

> "Our checks suggest the ad market remained solid in 3Q," analysts said in a Tuesday note. This, along with favorable currency movements, should increase revenue and profitability forecasts for these companies.

For Alphabet, KeyBanc maintained its Overweight rating and held its price target at $200. The company’s Q3 revenue is expected to be $86.6 billion, with EPS of $1.86, a slight increase from earlier projections.

> "We view Alphabet as more of a 'grind higher' story that should benefit from: 1. clarity on antitrust rulings; 2. ongoing cost reduction initiatives; and 3. Waymo entering the valuation," states KeyBanc’s note.

Meanwhile, Meta saw a significant price target increase, now at $655 from $600, as KeyBanc expects strong ad revenues driven by AI advancements and progress in Facebook Reality Labs.

Meta’s Q3 revenue is forecasted at $40.7 billion, exceeding the consensus estimate of $40.1 billion. EPS estimates also increased by 5.5% to $5.39.

Looking ahead, KeyBanc anticipates Meta’s earnings growth accelerating through 2026, with EPS potentially reaching $28 per share as AI benefits are realized and Facebook Reality Labs' operating losses moderate.

Pinterest also received an upgrade, with KeyBanc lifting its price target to $45 from $42. The firm noted that Pinterest has the most upside heading into Q3, thanks to favorable foreign exchange trends, solid engagement, and new features like Performance+, which could provide multi-year growth support.

> "We raised our 2H estimates to reflect a stronger ad market during 3Q and contributions from Performance+," analysts noted. KeyBanc’s 2025 and 2026 revenue and EBITDA estimates for Performance+ were also increased.

Moreover, Pinterest’s first holiday season with Amazon (NASDAQ:AMZN) and Google monetization is expected to drive stronger margins, positioning the company for 300 basis points of annual margin expansion.

Lastly, the firm increased its The Trade Desk price target to $130, reflecting expectations for strong Q3 results, with revenue projected at $623 million, slightly above the consensus estimate of $620 million.

KeyBanc also raised its Q3 and Q4 estimates to reflect a strong ad market and ongoing share gains, along with increased estimates for revenue and EBITDA in 2025 and 2026.